The 2022 results are in line with our expectations
The company announced its 2022 results: revenue of 210 million yuan, an increase of 652% over the previous year; the net loss returned to the mother in 2022 was 883 million yuan. The 2022 results were in line with our expectations.
Development trends
Nailick was successfully included in health insurance, and sales volume can be expected in the future. Nelec was conditionally approved by the China Drug Administration for chronic myeloid leukemia (CML) with T315I mutation in November 2021. The cumulative sales since its launch reached 182 million yuan, of which total sales in 2022 were 156 million yuan, and was successfully included in the 2022 national health insurance catalogue in January 2023. The annual treatment cost for patients after medical insurance was about 174,000 yuan after medical insurance. The company expects that Nalicol will receive full approval for indications in 1H23, further expanding the patient population to drug-resistant CML. In addition, clinical trials of Nalicol for PH+ALL and overseas CML clinical trials are progressing smoothly. We expect product sales revenue to grow rapidly as Nileko's future indications expand.
The clinical registration of APG-2575 is progressing smoothly, and we expect to achieve domestic listing in 2025.
The Bcl-2 inhibitor APG-2575 is currently undergoing clinical registration for the monotherapy r/r CLL in China. The company expects to complete the key registration phase 2 clinical study enrollment in 2023, and will submit a new drug marketing application on 1H24, which is expected to become the company's second commercialized product. In addition, APG-2575 is also undergoing a number of clinical trials around the world, and the 2022 ASH conference announced that the ORR of APG-2575 combined with acatinib for r/r CLL reached 98%. We believe that APG-2575 is a differentiated Bcl-2 inhibitor and is expected to be the first Bcl-2 inhibitor marketed for CLL in China.
Cash flow has improved, and a highly differentiated clinical pipeline has been built. By the end of 2022, the company's total book monetary capital was 1.5 billion yuan. In addition, the company allotted shares in January 2023. Up to now, the company's total book monetary capital was 1.88 billion yuan, and the cash flow situation has improved. We expect the company's current cash on the books to support R&D investment in the next few years. The company's product pipeline also includes the small-molecule inhibitor APG-115 targeting Mdm2-p53 PPI, the Bcl-2/Bcl-XL dual-target inhibitor APG-1252, the ALK inhibitor APG-2449, and the EED inhibitor APG-5918, which is currently exploring multiple clinical trials of solid tumors and hematomas using mono drugs and combination drugs to treat solid tumors and hematomas.
Profit forecasting and valuation
We expect Nalik to experience rapid volume expansion after it is included in health insurance, so we raised our 2023 revenue forecast by 26% to 379 million yuan, and introduced the 2024 revenue forecast of 439 million yuan for the first time. We kept our 2023 net profit forecast of 750 million yuan unchanged, and introduced a net profit forecast of 2024 - 832 million yuan for the first time. Adopting the DCF valuation method, we maintained an outperforming industry rating. Since we expect Nelicke to enter a rapid release period after being included in health insurance, we raised our target price by 28.0% to HK$30.0, which is 25.8% upward from the current stock price.
risks
Competition intensifies; clinical trial data or sales fall short of expectations; continued losses affect product development and advancement.